The United States and Japan will step up their defence cooperation to deal with the threat from nuclear-armed North Korea as tensions in East Asia remain high, officials from the two allies said on Thursday.

Harbour crossing may start in three years

Work on Sydney's second harbour rail crossing could start in two or three years if the NSW government wins the next election.

But the government has stopped short of saying how much the Sydney Rapid Transit project will cost.

Premier Mike Baird says he is confident $20 billion raised from selling off the state's electricity network poles and wires will be enough to contribute to the rail extension and other infrastructure across NSW.

"The difference between this plan and previous plans is we have announced the funding to go with it," he said of the rail project on Wednesday.

Forty nine per cent of the state's poles and wires will be sold on 99-year leases under a policy approved by Liberal and Nationals MPs following heated party room meetings on Tuesday.

The coalition will take the sale to the March 2015 election and if it wins approval, Mr Baird said he anticipates the transaction being completed by the end of 2016.

A second harbour rail crossing would be created with proceeds from the sale, extending the North West Rail Link through the CBD and on to Bankstown.